Netflix, Inc. (NASDAQ:NFLX) shares are trading lower Wednesday after the company reported fourth-quarter financial results and issued first-quarter guidance below estimates on Tuesday after the market closed. Multiple firms cut their respective price targets on the stock.
Netflix Earnings Breakdown, Analyst Updates
Netflix reported earnings per share of 56 cents, beating the consensus estimate of 55 cents. In addition, the company reported revenue of $12.05 billion, beating the consensus estimate of $11.97 billion.
Netflix said fourth-quarter revenue increased 18% year over year, driven by membership growth, higher pricing and advertising revenue. The company said operating income rose approximately 30% year over year during the quarter and paid memberships surpassed 325 million.
For the first quarter, Netflix guided for earnings per share of 76 cents and revenue of approximately $12.16 billion. The company said it expects advertising revenue growth to continue and plans to invest across content, advertising initiatives and newer formats including live events, video podcasts and games.
Analyst Changes: Following the earnings report, multiple analysts issued price target adjustments.
- Pivotal Research analyst Jeffrey Wlodarczak maintained a Hold rating on Netflix and lowered the price target from $105 to $95.
- Goldman Sachs analyst Eric Sheridan maintained a Neutral rating on Netflix and lowered the price target from $112 to $100.
- Needham analyst Laura Martin maintained a Buy rating on Netflix and lowered the price target from $150 to $120.
- Rosenblatt analyst Barton Crockett maintained a Neutral rating on Netflix and lowered the price target from $105 to $94.
- Guggenheim analyst Michael Morris maintained a Buy rating on Netflix and lowered the price target from $145 to $130.
Technical Analysis Of Netflix
The technical indicators suggest a challenging environment for Netflix. The stock is trading 11.2% below its 20-day simple moving average (SMA) and 25.6% below its 100-day SMA, indicating a significant downward trend. Over the past 12 months, shares have increased by 0.34% and are currently positioned closer to their 52-week lows than highs, reflecting ongoing struggles.
The RSI is currently at 25.74, indicating that the stock is in oversold territory, which could suggest a potential rebound if buying interest returns. Meanwhile, the MACD is above the signal line, indicating some bullish momentum, albeit in a generally bearish context.
The combination of an oversold RSI and a bullish MACD suggests mixed momentum, leaving traders cautious.
Benzinga Edge Rankings
Below is the Benzinga Edge scorecard for NetFlix, highlighting its strengths and weaknesses compared to the broader market:
- Momentum: Bearish (Score: 14.61/100) — The stock is underperforming the broader market.
- Quality: Solid (Score: 73.95/100) — The balance sheet remains healthy.
- Value: Risk (Score: 14.68/100) — Trading at a steep premium relative to peers.
- Growth: Strong (Score: 75.83/100) — Indicates potential for future expansion.
The Verdict: Netflix’s Benzinga Edge signal reveals a mixed outlook. While the Quality and Growth scores indicate some strength, the low Momentum and Value scores suggest caution, as the stock is currently trading at a premium and facing downward pressure.
NFLX Price Action: At the time of writing, Netflix shares are trading 6.82% lower at $81.14, according to data from Benzinga Pro.
Image via Shutterstock
